DC is fourth most affordable U.S. city for residents to buy a car
For once, DC gets good marks for affordability. A new study from Bankrate.com finds that Washington, DC, is the fourth most affordable city in which to buy a new car. Itês not that cars here are more of a bargain that elsewhere. Rather, the median income of $71,648 is the fourth highest in the nation, so residents can afford to spend more.
When calculating how much a household can afford to spend on a vehicle, Bankrate.com assumes a down payment of at least 20 percent; a maximum loan term of four years, and principal, interest and insurance not exceeding 10 percent of a householdês gross income.
As dealers well know, consumers rarely follow those guidelines for a new-vehicle purchase. Dealersê and lendersê flexibility on down payments and loan terms have helped many buyers to afford a new car.
Bankrate.com used median income, average insurance costs and sales tax data to determine an affordable sale price for a new vehicle in each of the 50 largest U.S. cities. In DC, that price is $25,236.88. But compared with the Kelley Blue Book average new car price of $33,865 nationwide, none of the affordable prices for the 50 cities was affordable using the Bankrate.com finance guidelines.Download Bulletin PDF